We’re getting there. It’s the beginning of the end of the pandemic in Canada and the U.S. People are feeling relief and optimism. However, for many investors, it’s also a time of concern.
This concern is captured in a term you’re going to hear more and more in the coming days and weeks: “peak reopening.” In a nutshell, investors are wondering if this is as good as it gets for businesses and share prices. Once we’ve hit “peak reopening” will the good times come to an end?
The caution is understandable. Even through the pandemic, investors have enjoyed 12 months of largely good, and often very good, returns. Now, as the pressures of the pandemic ease and more people are getting vaccinated, businesses are preparing to fully reopen. They’re looking for workers — job openings in the U.S. hit a record 8.1 million in March1 — and the economy is expected to grow. Economists and the Federal Reserve Chair expect U.S. GDP to grow in the range of 6%.2 The Canadian economy is predicted to grow by 4.5%.3
This is all great news as we work our way up to what is sure to be a boom in retail, hospitality and travel as restrictions are lifted. But everyone knows on the other side of a peak/boom is a fall, and what will be left at that point? That’s the fear.
My advice to investors: enjoy the run and stay the course. Too often, investors outsmart themselves by trying to time the markets and so they make the mistake of selling too soon or too late. The key is to be mindful of what’s happening both in the economy and with the stocks you’re invested in, stay disciplined, make sure your portfolio is diversified, and stick with good quality companies that are stable and growing.
A trusted advisor can help you navigate through difficult situations, help you keep emotion out of decision making, and stay focused on your goals.
To those investors who think we’re at a point where it’s as good as it gets, I think it’s going to get better — at least through to the end of the year. The U.S. and Canada will continue to do well. Global economies will continue to grow as they reopen. The gains will likely not be as great as they were at the start of this year and that’s okay. The markets are poised to end their year in positive territory.
Call Me or Email Me
My approach to investing is straightforward. I study the markets, global economies and what’s happening within industries to be in a position to best help my clients find good quality investments that will help them meet their goals. I build custom portfolios for each client. I welcome you to call me at 416-332-3863 or email me at allan@allansmall.com.
References
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- U.S. job openings soar to record 8.1 million, but businesses can’t find enough workers, Market Watch
- Fed’s Powell: 2021 GDP growth could be in range of 6%, Reuters
- 2021 economic outlook: Playing catch-up, BDC
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